The Australian printing industry recorded a fall in economic activity during the March 2006 quarter according to economic growth data released by the Australian Bureau of Statistics (ABS) today.

The ABS shows a 1.7 per cent fall in industry activity in seasonally adjusted terms and a 0.4 per cent fall when measured in trend terms for the March 2006 quarter compared to the December 2005 quarter.

However compared to the same period 12 months ago economic activity was up by 3.7 per cent on a seasonally adjusted basis and by 2.3 per cent on a trend basis.

The Australian economy expanded once again during the March 2006 quarter growing by 0.9 per cent (seasonally adjusted) and 0.6 per cent (trend). On an annual growth basis the Australian economy grew by 3.1 per cent (seasonally adjusted) and by 2.8 per cent (trend) during the 12 months to March 2006.

Key economic drivers were business investment, the government sector and household consumption. Retracting from growth were net exports and investment in dwellings.

Compensation of employees (payments to) increased by 1.5 per cent during the quarter and by 7.1 per cent during the year to March 2006. Gross operating surplus increased by 1.0 per cent for private corporations and was up by 11.3 per cent for the year to March 2006.

The figures show that import penetration increased from 35.1 per cent during the December 2005 quarter to 35.6 per cent during the March 2006 quarter. For the same period 12 months ago import penetration stood at 34.3 per cent. This means that for every single dollar spent by households during the March 2006 quarter 35.6 cents was spent on imported goods.

Western Australia recorded the highest rate of economic growth with an annual rate of growth of 11.1 per cent in trend terms, followed by Queensland at 7.7 per cent, Tasmania at 5.2 per cent, Northern Territory at 5.0 per cent, Victoria at 3.4 per cent, Australian Capital Territory at 3.2 per cent, South Australia at 3.0 per cent, and New South Wales at 1.9 per cent.

The release of the March 2006 quarter economic growth data follows the release in recent days of a number of key economic indicators.

The March 2006 quarter private new capital expenditure data released on 1 June 2006 showed that while new capital expenditure was flat in the printing industry compared to the December quarter, on an annual basis the increase was in the order of more than 30 per cent.

On 5 June 2006 the March 2006 quarter sales and pre-tax profits data were released showing a 1.6 per cent fall in printing sales (seasonally adjusted) and a 0.3 per cent fall (trend) compared to the December 2005 quarter. More importantly compared to the same period 12 months earlier - sales in the printing industry rose by 3.2 per cent (seasonally adjusted) 2.2 per cent (trend).

Pre-tax profits in the printing industry fell sharply during the March 2006 quarter to be 17.6 per cent lower than the December 2005 quarter outcome and 9.4 per cent lower than for the same period 12 months earlier.

Printing Industries Manager, Industry and Commercial Policy, Hagop Tchamkertenian said the dip in growth, sales and profits during the March 2006 quarter were expected.

"Our internal research combined with feedback from the industry was pointing to a downturn in industry activity during the March quarter," he said.

"The sharp reported decline in pre-tax profits remains a concern as the deterioration is not limited to the March quarter outcome compared to the December quarter, but represents a clear deterioration over the year to March 2006.

"With sales increasing on both a trend and seasonally adjusted basis we can see that improved sales have come at the expense of profits.

"Again this is consistent with the trend of declining selling prices that  our research has been showing for the past 21 quarters," Mr Tchamkertenian said.